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JanLaabh Research Team
Editorial Team · JanLaabh.in
The JanLaabh Research Team tracks central and state government schemes across education, employment, health, and social welfare. Each guide is researched from official portals — MSDE, myScheme.gov.in, IBA circulars — and reviewed before publication.
Banking, Financial Services and Insurance · Central Scheme
Skill Loan Scheme is launched by the Ministry of Skill Development and Entrepreneurship. It gives collateral-free loans for skill development courses. After the July 2024 revision, the maximum loan amount is now ₹7.5 lakh (earlier ₹1.5 lakh). Lenders now include banks, NBFCs, and small finance banks.
Skill DevelopmentEducation LoanUp to ₹7.5 LakhNo Collateral3–7 Yr RepaymentAll India
Written by
·
Last Updated: 17 June 2026·
Source: MSDE / IBA Guidelines
What is the Skill Loan Scheme?
The Skill Loan Scheme was started in July 2015 by the Ministry of Skill Development and Entrepreneurship (MSDE). It gives people bank loans to pay for skill development courses without needing any collateral.
In July 2024, the scheme was revised. The maximum loan amount was raised from ₹1.5 lakh to ₹7.5 lakh. NBFCs, NBFC-MFIs, and small finance banks were added as eligible lenders — earlier only IBA member banks could give these loans. The revised scheme also covers more courses, including those listed on the Skill India Digital Hub (SIDH).
The scheme targets anyone who has taken admission in an NSQF-aligned course. The goal is simple — make skill training affordable for people who cannot pay the fees on their own.
Features of Skill Loan Scheme
Updated July 2024: Maximum loan raised to ₹7.5 lakh. NBFCs and small finance banks added as lenders. More courses now covered beyond NSQF.
Loan Amount
Up to ₹7.5 lakh (revised July 2024)
Course Duration
No minimum duration required
Eligible Courses
NSQF-aligned + courses on SIDH portal
Lenders
IBA banks, NBFCs, NBFC-MFIs, small finance banks
Moratorium Period
Full course duration — no repayment during training
Collateral
None — lenders cannot ask for any security
Interest Rate
RLLR or MCLR + up to 1.5% (as per RBI guidelines)
Credit Guarantee
Up to 75% of loan amount covered by CGFSSD
What the Loan Covers
Course fees paid to the training institute + assessment fees, examination charges, and study material
Repayment Period by Loan Amount
1
Up to ₹50,000
Repayment up to 3 years
2
₹50,000 – ₹1 Lakh
Repayment up to 5 years
3
Above ₹1 Lakh
Repayment up to 7 years
Credit Guarantee Fund for Skill Development (CGFSSD): Set up in November 2015 and managed by NCGTC. Banks and NBFCs get a guarantee of up to 75% of the outstanding loan amount against defaults. The fee is not more than 0.5% per year. After the 2024 revision, the maximum loan size eligible for this guarantee has also been raised to ₹7.5 lakh.
Benefits of Skill Loan Scheme
No Collateral
You don't need to pledge any property or asset. Banks cannot ask for security.
Higher Loan Limit
Up to ₹7.5 lakh after the 2024 revision — covers high-end courses too.
No Repayment During Training
The moratorium covers the full course duration. You start repaying only after training ends.
Flexible Repayment
3 to 7 years depending on loan amount. Smaller loans have shorter tenure, keeping EMIs manageable.
Short Courses Also Qualify
There is no minimum course duration. Even a short skill certificate course is eligible.
All Course Costs Covered
Fees, exam charges, assessment fees, and study material — all included in the loan.
More Lenders Available
NBFCs, NBFC-MFIs, and small finance banks now give skill loans — not just regular banks.
Bank Protected by Guarantee
CGFSSD covers up to 75% of the loan amount. Banks take less risk, so loan approvals are easier.
Skill Loan Scheme Eligibility
Any Indian national who has taken admission in a qualifying course can apply. The eligible institutions are:
Industrial Training Institutes (ITIs)
Polytechnics
Schools recognized by Central or State education Boards
Colleges affiliated to a recognized university
Training partners of NSDC, Sector Skill Councils, State Skill Mission, or State Skill Corporation
The course must be NSQF-aligned or listed on the Skill India Digital Hub (SIDH). There is no minimum age or minimum course duration requirement.
How to Apply for Skill Loan Scheme
You can apply online through the Vidya Lakshmi Portal. The whole process is online — no branch visit needed to start your application.
1
Keep Your Documents Ready
Gather proof of identity, proof of address, and income proof (of self or guardian, if available) before you begin.
2
Register on Vidya Lakshmi Portal
Go to vidyalakshmi.co.in, create a free account, and fill in your profile details.
3
Fill the Loan Application
Enter your personal details, course name, and institution details in the online form and submit it.
4
Choose a Lender
Pick one or more banks, NBFCs, or small finance banks from the list and send them your application.
5
Compare and Accept an Offer
Review the loan offers you get and accept the one that suits you best.
6
Loan Disbursement
After approval, the course fees go directly to the training institute. Other amounts are as per the lender's process.
Documents Required for Skill Loan Scheme
1Proof of identity (Aadhaar, PAN, Passport, Voter ID, etc.)
2Proof of address (Aadhaar, utility bill, ration card, etc.)
3Proof of income of self or guardian (if available)
4Admission letter or proof of enrollment in the course
This is not a complete list. Each lender may ask for more documents. Check with your chosen bank or NBFC before applying. If the student is a minor, a co-borrower (parent or guardian) is required.
Frequently Asked Questions
What is the Skill Loan Scheme?
It is a government loan scheme started in 2015 by MSDE. It gives collateral-free loans for skill development courses. The scheme was revised in July 2024 — the loan limit went up from ₹1.5 lakh to ₹7.5 lakh, and more lenders were added.
How much loan can I get under the Skill Loan Scheme?
After the July 2024 revision, you can get up to ₹7.5 lakh. The original scheme had a limit of ₹1.5 lakh.
Who can apply for the Skill Loan?
Any Indian national who has taken admission in a course at an ITI, Polytechnic, recognized school, affiliated college, or an NSDC / Sector Skill Council / State Skill Mission training partner.
What is the interest rate on the Skill Loan?
The rate is RLLR (Repo Linked Lending Rate) or MCLR plus an add-on of up to 1.5%, as per RBI guidelines. The exact rate depends on your lender.
Do I need to give any collateral?
No. Banks, NBFCs, and other lenders under this scheme cannot ask for any collateral or third-party guarantee.
When do I have to start repaying the loan?
Repayment starts after the moratorium period, which covers the full duration of your course. You don't pay anything while you are in training.
How long is the repayment period?
Up to 3 years for loans up to ₹50,000; up to 5 years for loans between ₹50,000 and ₹1 lakh; and up to 7 years for loans above ₹1 lakh.
What does the Skill Loan cover?
Course fees paid directly to the training institute, plus assessment charges, examination fees, and the cost of study material.
Which banks give Skill Loans?
All IBA member banks. After the 2024 revision, NBFCs, NBFC-MFIs, and small finance banks are also eligible. Check the full list on the Vidya Lakshmi Portal.
Is there a minimum course duration to be eligible?
No. There is no minimum course duration. Even short-term skill courses qualify.
What is the CGFSSD?
The Credit Guarantee Fund for Skill Development was set up in November 2015 and is managed by NCGTC. It gives lenders a guarantee of up to 75% of the outstanding loan in case of default. The fee is up to 0.5% per year. After 2024, the guarantee now covers loans up to ₹7.5 lakh.
How do I apply for the Skill Loan?
Apply online at vidyalakshmi.co.in. Register, fill the application, choose a lender, and track your status online.
Ready to apply for the Skill Loan Scheme?
Apply online on the Vidya Lakshmi Portal — no collateral, no branch visit needed.
Information on this page is based on official guidelines by the Ministry of Skill Development and Entrepreneurship (msde.gov.in), IBA, and myscheme.gov.in, including the July 2024 revision. Scheme terms can change — always confirm current details on the Vidya Lakshmi Portal or with your lender before applying. JanLaabh.in is not affiliated with MSDE, NCGTC, or any government body.